Reich writes: The result has been a degree of inequality this nation hasn't witnessed since the days of the robber barons of the late nineteenth century - an inequality that's harming our economy as much as it's undermining our democracy."

Portrait, Robert Reich, 08/16/09. (photo: Perian Flaherty)

Inequality is Undermining Our Democracy

By Robert Reich, Robert Reich's Blog

11 December 12

ashington has a way of focusing the nation's attention on tactical games over partisan maneuvers that are symptoms of a few really big problems. But we almost never get to debate or even discuss the big problems because the tactical games overwhelm everything else.

The debate over the fiscal cliff, for example, is really about tactical maneuvers preceding a negotiation about how best to reduce the federal budget deficit. This, in turn, is a fragment of a bigger debate over whether we should be embracing austerity economics and reducing the budget deficit in the next few years or, alternatively, using public spending and investing to grow the economy and increase the number of jobs.

Even this larger debate is just one part of what should be the central debate of our time - why median wages continue to drop and poverty to increase at the same time income and wealth are becoming ever more concentrated at the top, and what should be done to counter the trend.

With a shrinking share of total income and wealth, the middle class and poor simply don't have the purchasing power to get the economy back on solid footing. (The wealthy don't spend enough of their income or assets to make up for this shortfall, and they invest their savings wherever around the world they can get the highest return).

As a result, consumer spending - fully 70 percent of economic activity - isn't up to the task of keeping the economy going. This puts greater pressure on government to be purchaser of last resort.

The dilemma isn't just economic. It's also political. As money concentrates at the top, so does power. That concentrated power generates even more entrenched wealth at the top, and less for the middle class and the poor.

A case in point is what's now happening in Michigan. In the state where the American labor movement was born - and where, because of labor unions, the American middle class once had the bargaining power to gain a significant portion of the nation's total income - Republicans and big money are striking back.

Legislators in the Michigan state House, followed almost immediately by Republicans who dominate the state Senate, voted Thursday afternoon to eliminate basic union organizing and workplace protections for both public and private-sector workers. Michigan Republican Governor Rick Snyder says he'll sign the measure.

This anti-labor blitzkreig was launched and coordinated by "Americans for Prosperity" - a group developed and funded by the right-wing industrialists and billionaire campaign donors Charles and David Koch, to "pave the way for right to work in states across our nation."

The Koch brothers are the same ones, not incidentally, who several years ago backed a group called "Citizen's United," on its way to the Supreme Court for an opinion by the Court's Republican majority that opened the floodgates to big money corrupting our federal and state governments. (The brothers Koch have also entertained Justices Scalia and Thomas at strategy meetings they've organized of Republican donors.)

Connect the dots: As unions have withered, the middle class's share of total income and wealth has dropped. The decline of the median wage in America over the last three decades correlates exactly with the declining percentage of American workers who are unionized.

And as the super-rich have grown even wealthier, they've been able to extend their power through the Supreme Court and the Republican Party - advancing a war on the middle class.

These moneyed interests may lose a skirmish or two, particularly at the federal level when the public's attention is focused there (Michigan voters went overwhelmingly for President Obama and Democratic Senator Debbie Stabenow on November 6). But the moneyed interests are patient and relentless and, as is evident in Michigan, able to strike suddenly with extraordinary organization and precision.

They've taken on our tax system, successfully raising taxes on the middle class and the poor (Social Security payroll taxes, sales taxes, and user fees) while reducing their own top marginal tax rates. They've taken on public spending - cutting government workers and programs the poor and middle class depend on (teachers and school budgets, social workers and family support services, job training and unemployment insurance, to name only a few.)

And they've taken on the unions that once negotiated good wages on behalf of the middle class and of those who aspired to join it.

The result has been a degree of inequality this nation hasn't witnessed since the days of the robber barons of the late nineteenth century - an inequality that's harming our economy as much as it's undermining our democracy.

As Washington fiddles over the fiscal cliff, a larger battle over inequality is being waged all over America.

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Quoting "As unions have withered, the middle class's share of total income and wealth has dropped." The demise of the middle class is not that simple. One could just as easily said that the signing of NAFTA caused the demise of the middle class.; or the exporting of auto production by the big three caused the demise. The decline of union power is due to economic facts brought about by a free trade world. Toyota now advertises that they have the most American made cars

The Michigan voters overwhelmingly turned down making union bargaining part of the state constitution, and ina democracy majority rules.

There may be another force at work here. Many people have seen their wages shrink over the past three years, while government workers and union members have kept their jobs and received raises. The rest may simply be jealous.

Wages in the sectors you mention, union and government, have been largely flat, with the exception that the unions have agreed to sharply lower wages for new hires, a bad thing, since the non-union manufacturers set their scale by what the unions are doing.

As to the jealous part, I suppose the rest of us may be jealous that they still have jobs.

What you say about the "free trade world" though is spot on. But I disagree that these changes are brought about by economic facts, as if there is no alternative.

The free trade problem is a political one, brewed up in financial and manufacturing boardrooms with the intent of crippling the union's bargaining power by creating a global free labor market. Their overall intent is to take a bigger share of the proceeds from the enterprise while allowing those who do the work to keep much less.

It is entirely reasonable to insist that this free trade propaganda has won the debate and that it's victory has beaten down the working class and is evicting workers from the middle class by the millions. Only a resurgent movement of workers ---"the Unions"---can create a political climate where this dangerous trend can be reversed.

//The free trade problem is a political one, brewed up in financial and manufacturing boardrooms with the intent of crippling the union's bargaining power by creating a global free labor market.//

Would it logically follow then that the Unions are striving for an unfree market where their leadership has a monopoly on who is and who is not allowed to work?

What "free market" are you talking about? You mean the "free market" that gave the railroads in the 19th century free or low-cost land and huge financial subsidies? Are you talking about the "free market" that today gives huge subsidies to the oil industry (which itself is hardly a "free" competitive market). The free market to which you are referring is mythology and not reality. No major new industry in this country whether it is the railroads in the 19th century or Silicon Valley in the 20th (which didn't develop due to whiz kids working in their basements but rather to large defense contracts) or Big Pharma (where much of the basic research is done with gov't money) developed without sizable gov't financial assistance (whether it be in the form of tax breaks or subsidized financing)

When the government has, like now, lost its ability to protect freedom of opportunity as a result of seizure of the economy by a small but immensely wealthy gang of plutarchs able to buy the assistance of plenty of corrupt government officials and have the law modified--virtually rebuilt--to suit their purposes,

with the purpose of reforming the U.S. into a widely separated two-class system of economic slaves and masters, with control of government in the hands of the plutocrats,

then, clearly, there is nothing resembling a free market remaining, and too little wealth and power in the hands of the 99% to get it back.

thanks for the comment Fiona and while i agree with you about our current situation i would argue that this country (or any other capitalist country for that matter) has never had the kind of laissez faire "free market" that Martinfre keeps referring to. It's a myth. Has never existed. So, we shouldn't be bemoaning the loss of something that never existed but instead understand that "the market" (the economy) and the gov't (the state) have always worked together and served one another and that in fact capitalism never would have developed without gov't assistance (whether it is the enclosure laws in england that made it impossible for people to live independently and be self-sufficient without becoming wage laborers; or gov't contracts such as those that supported the first truly capitalist enterprises i.e., the joint stock and trading companies; or laws and regulations that allowed for the creation of the private banking and capital markets of the Dutch in Amsterdam and later of the British in London).

We have had a laissez faire economy. Durimg the first several administrations, whether and how much to restrain banks was a major point of contention--enflamed by the banks' unrelenting pressure to seize control of the economy. Andrew Jackson (perhaps apocryphally) had carved on his tombstone, "I beat the banks!" But of course, he didn't; it takes constant vigilance to protect anything from banking and corporate grasp--as we have learned again, each time our vigilance was relaxed.

//When the government has, like now, lost its ability to protect freedom of opportunity as a result of seizure of the economy by a small but immensely wealthy gang of //

If only I could make money selling clues to the clueless ... sigh

The easiest way to confiscate masses of wealth is to have monopoly control over the printing pre$$ . with a few turns of that magical printing press (what Ben Bernaki said the government had to save us from deflation) the wealth of millions can be obliterated or more accurately transferred to the balance book of government bureaucrats.

// Are you talking about the "free market" that today gives huge subsidies to the oil industry//

I see your Stuck confusing the failures of socialism as if they were capitalism.In a free market exactly how are they to get any subsidy?

A subsidy requires government to take from party A - Usually general public -and give to a special interest group say oil companies or unions.

With capitalism - specifically a free market the only money any industry gets is what customers choose to send their way.

In fact, i am quite clear on the failures of soviet or chinese style socialism (which is really not and never has been socialist but rather state capitalism something which was understood by democratics socialists/communists as far back as the 1940s e.g., the writings of C.L.R. James amongst others).

You keep referring to the capitalist "free market" when my whole point was that this is mythology and not historical or current reality. so, are you saying that the US is socialist and not capitalist because it does not have a "free market" as you define it (i.e., no gov't intervention and or support/subsidies of any kind)? In this case there has never been a capitalist nation as capitalism and the state (i.e., gov't) have been inextricably linked and bound together since the very birth of the capitalist system going back to the Italian city states in the 15th and 16th centuries.

The phrase State capitalism is an oxymoron, Like the living dead or free slave.

Capitalism refers to a system of individual PRIVATE PROPERTY, PRIVATE PROPERTY RIGHTS.

No, state capitalism is the norm and at best a redundency. And, capitalism as an economic system refers to and is based on a system of wage-labor in which the means of production are owned and controlled by the few and the producers (for the most part...and, in fact, Marx for example was clear that small family owned businesses are not capitalist per sey)are separated from ownership.

Your point has repeatedly been that the problem is gov't intervention (regulation, subsidies, etc) in the "free market" economy to which my response is that this "free market" economy has never existed and is part of capitalist mythology and i have given you several historical examples from the enclosure laws in England to the sponsorhsip/subsidies of the first capitalist corporations (joint stock companies, the railroads in the US, etc). you have not provided one single historical example of where this mythological "free market" capitalist system has ever existed. Now if you want to say well then we have never had capitalism that is a different argument but one which i still think reflects a complete lack of understanding about how capitalism works and the real history behind its development.

That phrase is an evasion to not use accurate words like socialism or fascism.

Capitalism is PRIVATE PROPERTY. no other system identifies private property -- an no other system requires freedom to exist.

The closest to capitalism a free market we have had was Hong Kong before the Chinese mainland got their grubby mitts on it -- a tiny little spit of land with no natural resources but freedom and human ingenuity and it had 1/8th the total economy of mainland China.

Why people are soo stupid as to worship the economic nightmare of the main land and ignore the brilliance of the mind freed astounds and disappoints me. Too many people want to use government to force others to work for them I suppose.

As for the "living dead"....the other term for this would be Zombie which in many ways is quite an accurate description for how contemporary capitalism works....see Chris Harman's "Zombie Capitalism" on this and for one of the best explanations for the causes of the current global econmic crisis (a crisis of profitability as all capitalist economic crises ultimately are)...or David McNally's brilliant recent work "Monsters of the Market: Zombies, Vampires and Global Capitalism"

Since you dismiss the notion of state capitalism as an oxymoron, i suspect you have never read any of the state capitalist theorists...you should try reading serious theorists before dismissing them out of hand...when it comes to the theory of state capitalism the writings of C.L.R. James (one of the great intellectuals of the 20th century though because he is both black and from Trinidad is barely known and almost never read in the US except for his seminal text The Black Jacobins on the Haitian revolution) is the best place to begin.

So If your going to destroy the meaning of capitalism to obliterate the distinction between capitalism and collectivist economies like fascism/socialism/mercantilism -- if not capitalism then what do you call a system with private property rights?

So If your going to destroy the meaning of capitalism to obliterate the distinction between capitalism and collectivist economies like fascism/socialism/mercantilism -- if not capitalism then what do you call a system with private property rights?

How am i "destroying the meaning of capitalism" to say that capitalism is not simply a system based on private property but one based on wage labor or the sale of labor power. the problem with saying that capitalism is simply a system based on private property is that this does not explain how value is created or expands under capitalism nor explain how this differs from for example feudalism. i never said that capitalism is not also based on private property (e.g., private ownership of the means of production) but value is created in production as is economic expansion i.e., it comes from production not simply private property. in any case you still have not responded to my main point which was to challenge your notion that capitalism is a system based on this notion of a laissez faire free market which i have contended is a myth and has never existed except in the minds of extreme right wing ideologues (something Adam Smith understood since he called for gov't intervention in order to create and grow the very market he then referred to as "the invisible hand."

"Capitalism" refers to the specific economic system of investment and accumulation of capital. Whether it's through individually free private property or the collusion between state and business -- fascism -- it's still a form of capitalism.

Fascism is not "collectivism." It's the ultimate government-corporate partnership.

So long as there is not one currency and one set of banking laws, a worldwide market without restraint will prevent any peoples from living comfortably on their earnings. NOBODY EVER wanted a worldwide free market--except those who are presently using it to suck up all the wealth from their former home country.

'Free Trade' has been given academic cover by Universities that have been well paid for it. The country is full of Junk Science and Junk studies showing all kinds of advantageous crap for industry. Only when we as a country look at all of this junk, and actually use our brain to realize it is nothing but a bunch of smoke with the intellectual vigor of a 5 year old, will things change...and the intellectual laziness of Americans these days...I'm not holding my breath. Maybe when there are company towns where you get farther and farther in debt again.

It's a bit late, but finally most intelligent people have caught the reality that dedicating a government to building an oligarchy will not help them at all. Why it took 30 years of sucking at the teat of "trickle down" and "supply side," until it was too late to rescue the country readily, for so many people to give it up, is beyond me. The lie was obvious from the start. WTF is wrong with people?

I think you're on to something in that many Americans are clearly jealous of the wages earned by union members. The resentment that arising is dysfunctional in that instead of harboring resentment at what others have, we should all be seeking to organize, gaining the same advantages.

Unions are certainly not above criticism when their leadership becomes corrupt, they engage in feather bedding or wholly resist technological changes in factory production. They ARE however a vital part of the system of checks and balances between management and labor. In my lifetime (near 60 now) I've seen the pendulum swing too severely towards management with the corp. media ignoring incompetent management, focusing instead on scapegoating unions at every turn. It started with Reagan's firing of the aircraft controllers and the AFL-CIO's total failure to stand up for them with a nationwide strike. It's well past time for a nationwide shutdown of the economy in retaliation for greedy corporate overreach, but quite difficult to do without union organization and numbers behind such a move.

The big promise of automation was that it would produce at the same or a higher level with less man hours required, resulting in a shorter work week for the same pay.

Instead, of course, by dint of who owns the factories and the technology, it has resulted in the same man hours per worker but fewer workers. Thus technology has benefitted only the shareholders, who do no work.

Short of socialism, there is no force to oppose this except unions. But rather than oppose the technology or resort to featherbedding, they should be fighting for their share of the benefits from technology: keeping the same number of workers, at a shorter work week for the same pay.

//Very funny: Thinking that wealthy investors are "taking risks." How then, pray tell, did they become wealthy?//

Are you serious? Im afraid you are. Ok

I spend many years on a real estate property - I paint the outside and insides, replace the roof/windows/furnace upgrade electrical baths kitches etc. tenents have a nice place to stay and after a decade or so I sell and recoup my time and effort and make a profit when I sell -- lets say $10,000

I invest $10,000 into a pet rock opportunity -- every one must have one how can I miss. Well a few weeks after the joke gets stale that $10,000 representing years of toil and effort are wiped out. That is called Risk - the down side of risk is you can lose some or all of it.

Value comes from if some one wants "it" or not - that "it" could be labor, it could be gold, it could be a home, it could be ... an antique car ... what some one values.

Economic risk applies only to little people; you know that by now. When the big guys played a dangerous game, gambling our money on a long shot, and lost, we just paid them back out of our federal budget--together with bonuses (sometimes in the hundreds of thousands of dollars) for the people who blew it up in the first place. That's why Jamie Dimon went right ahead and put between 3 and 6 TRILLION DOLLARS at risk again, and blew up again, a couple of months ago--no skin off his back.

//Economic risk applies only to little people; you know that by now.//

That is lame and illogical. Many high and mighty have been wiped out never to recover. Those who seem to avoid the consequences of their failures typically are closely tied to the government tit like the banksters ( is Jamie Dimon one of these?) that we are forced to bail out involuntarily. Even if we don't pay a dime in income taxes the inflation tax that jacks up the prices we all are paying for everything to re-inflate those bozos is unconscionable.

An that multi-trillion bail out mentality is only possible with a socialist/fascist government that thinks they know best how to deal with the little peoples money.

We allowed some 0.1% of the population to gain enough control over the economy to buy Congress and the Supreme Court. Those zillionaires have used both (and the previous administration, beyond imagination) to protect the mega-rich

Individual capitalists can be "wiped out" of course but this does not explain how the economic system as a whole is organized and fails to understand the the raison d'etre for capital and for the capitalist class as a whole is simply to grow (as Humphrey Bogart explains about what Edward G Robinson's Johnny Rocco wants in Key Largo...."More"...that's capital...and, in order to get "more" to continue to grow as a system individual capitalists must and always will be "sacrificed" but here again this does not in any way speak to the inherent inequality of the system as a whole nor its fundamental exploitative nature that views human beings as commodities, mere machines like any other that is to be used until it no longer has one for the capitalist at which point it is gotten rid of like any worn out piece of equipment.

As for bailouts being "socialist/fascist"...first, you need to do a bit more reading about the nature of both socialism and fascism (and capitalism as well for that matter) because you confuse/conflate them all into being essentially the same thing. capitalism has always bailed out, supported, provided subsidies (financing as well as tax breaks) to capitalist industries so by your definition there has never ever been capitalism at all (name me one historical example where capitalism has developed with the kind of laissez faire "free market" you think existed at some point in history...it has never been).

//"More" ...that's capital...and, in order to get "more" to continue to grow as a system individual capitalists must and always will be "sacrificed"//

While it may make for a cool line in a movie - in reality that requires the false premise that wealth is neither created nor destroyed it is only redistributed. That is a win-lose. A win for a requires an equal lose for b in the zero sum game. The zero sum game mentality totally ignores the reality of win-win and loose-loose. But the Zero sum game sells very will to those of greedy and petty minds who want blame some one else for their problems, and more importantly make some one else pay for them.

//"More" ...that's capital...and, in order to get "more" to continue to grow as a system individual capitalists must and always will be "sacrificed"//

While it may make for a cool line in a movie - in reality that requires the false premise that wealth is neither created nor destroyed it is only redistributed. That is a win-lose. A win for a requires an equal lose for b in the zero sum game. The zero sum game mentality totally ignores the reality of win-win and loose-loose. But the Zero sum game sells very will to those of greedy and petty minds who want blame some one else for their problems, and more importantly make some one else pay for them.

No, not at all. Real wealth is absolutely destroyed and not simply redistributed. When capitalism suffers from low profitability this means at least in part that there is an excess of capital as a whole and it is often only through the destruction of capital (or wealth) that the system can then return to profitability. so, i am not in any way saying that under capitalism wealth is not destroyed. A huge amount of wealth was in fact destroyed in the current economic crisis but i would argue that this was insufficient to restore the system (overall and on a global basis) to return the system to the level of profitablility (again, i'm talking about the rate of profit not simply how many gazillions is any particular company making) it needs to overcome its own crisis.

My dear Martin: Like most who use the words, you have no clue whatever of the definitions and meanings-in-use of "capitalism," "socialism," or "fascism." Unfortunately, your view of "free market" resembles that of Grover Norquist, who perfected his theory when he was 12 and the world was simple.

Wealth is not only destroyed--it is created. Each time a dollar changes hands, the transaction creates wealth. A dollar in the hands of a poor or unemployed person creates over $1.80 in wealth, while a dollar in the hands of a financier or corporatist creates about 54 cents. The confusion of money with wealth has much to do with Americans' failure to comprehend the destruction wrought on the nation by moving money outside of the country without compensation. Even more basic, the lack of understanding of money as against wealth is what allows people to believe the lie that a national economy is "like" and requires the same behaviors as a household economy. THAT has been used to trash us, as much as any other lie in this whole mess.

There are two types of Value: use value and exchange value. If the thing has a use for people it has use value but this does not mean it necessarily has an exchange value. If people are willing to "trade" for it then it has an exchange value but this still does not say what the value of the thing is or how it is derived so you have not gotten to the root of value (or risk for that matter) at all but rather merely stated (imprecisely) the obvious.

Do some wealthy investors "lose"; sure but that is because the nature of the capitalist system is to protect the interests of the system as a whole rather than individual capitalists and some some will always lose and be destroyed as the system as a whole tries to maintain and maximize its rate of profit. But, the fact that some wealthy investors go under does not speak to the inherent unfairness and exploitative nature of the capitalist system as a whole nor that it is organized to protect the interests of the capitalist class as a whole (or more precisely the expansion of capital as a whole)which means necessarily that not all individual capitalists always win (and here one also has to look at the specific class forces/relations existing and the state of class struggle -- an example here would be the recently published "The Rich Don't Always Wind" by Sam Pizzigati which shows how the only reason we got a middle class in this country was because people organized and fought for it).

As you recall, the dream of technology was greater rewards for less labor. Maybe we should have foreseen that the more likely outcome of efficient production was what has happened: someone would OWN the means of production, and unsatisfied with more money than he could spend in a dozen lifetimes, dedicate himself to what the owners have now done--use the availability of extra labor to deprive many of work at all, while working the others to death under the fear of having no job at all.

As you recall, the dream of technology was greater rewards for less labor. Maybe we should have foreseen that the more likely outcome of efficient production was what has happened: someone would OWN the means of production, and unsatisfied with more money than he could spend in a dozen lifetimes, dedicate himself to what the owners have now done--use the availability of extra labor to deprive many of work at all, while working the others to death under the fear of having no job at all.

Grat point Fiona, i would add that what even most capitalist economics at least officially don't understand or recognize is that the more they introduce technology that replaces human laborers the lower their rate of profit and so new technology does not solve one of the system's basic contradictions or tendencies which is for the rate of profit to fall which is ultimately what causes the system to go into crisis until profitability can be restored (usually through a tremendous destruction of "value" whether through busineeses going bankrupt or the physical destruction of excess capital in war for example).

On "our side"...we need to tie the increase in productivity produced by new technology with demands to shorten the work week...this is one way to put everyone back to work as well as capture some of the increased profits resulting from increased productivity which so far has been going almost exclusively to the 1%.

Ideally, either government or collective bargaining would correct the situation by distributing man-hours equitably over members of the work force, so that more workers would have decent wages, and the unneeded excess man-hours would be enjoyed by all.

Ideally, either government or collective bargaining would correct the situation by distributing man-hours equitably over members of the work force, so that more workers would have decent wages, and the unneeded excess man-hours would be enjoyed by all.

Unfortunately, we are now working more hours instead of less (particularly in the US...at least for those still lucky enough to have jobs at all). The real answer, i think, is to renew the calls for a cut in the work week with no cut in pay (which was historically always a central part of the demands of the working class throughout the world). More work for all, yes, but more leisure time too!

Absolutely. That is EXACTLY what unions brought us, and defended, until our lack of defending them brought us back to the situation they existed to repair. In those days, people worked 16 or 18 hours a day, often 7 days a week, for scarcely enough to feed their family and not enough for adequate fuel to heat their homes, while others could not find jobs. It was UNIONS, folks, that gave us everything workers took for granted and relied on--including a work week of reasonable hours and reasonable pay, creating more jobs and healthier families.

Unions are being killed at a prodigious rate during the Age of Industrial Enslavement in which we live. Some of you will live to see the shorter work week, made possible by technology, revert to the endless work week for low pay, and enormous unemployment. That IS the Gilded Age, and it is returning pretty rapidly.

There is no reason the U.S. cannot have a shorter work week and higher pay, simultaneously, today--except the lust of the 0.1% to own it all, and hide it from taxation. But who is "to renew the calls for a cut in the work week with no cut in pay" without organization, without unions?

Early in the discussion of outsourcing jobs, when the crippling effect was just beginning to be seen, corporate leaders were asked what changes would have to happen in order for them to return jobs to the U.S. and they said, unequivocally, "As soon as Americans decide to work for what we pay the Chinese workers."

Good luck with your fantasy free-market opportunities and "demands" of employers, guys. To the people in control, you ain't sh*t.

Please watch this clip from TP. IMHO it summarizes the entire issue in a simple, but not simplistic, way:http://front.moveon.org/hollywood-legend-ed-asner-has-outraged-republicans-over-this-animated-short/#.UMdv_7fCIi4.facebook

A few years ago when BMW wanted to establish the South Carolina plant, they were required to reach agreement with their German union before they could take those jobs out of the country. In the end, BMW started up another industry to use the facilities and hire the workers in Germany, so they could come here (as we go to China) to utilize our low-paid non-union labor--WITHOUT damaging their own economy.

We are not that smart. We hear the users bashing unions and union workers, and we follow right along like the fools we are, helping break the economy that we need to be strong to support us and our families.

Quoting "As unions have withered, the middle class's share of total income and wealth has dropped." The demise of the middle class is not that simple. One could just as easily said that the signing of NAFTA caused the demise of the middle class.; or the exporting of auto production by the big three caused the demise. The decline of union power is due to economic facts brought about by a free trade world. Toyota now advertises that they have the most American made cars

The Michigan voters overwhelmingly turned down making union bargaining part of the state constitution, and ina democracy majority rules.

There may be another force at work here. Many people have seen their wages shrink over the past three years, while government workers and union members have kept their jobs and received raises. The rest may simply be jealous.

you are trying to make it sound like the creation of "a free trade world" was simply "natural" and just happened all by itself instead of understanding that this was a conscious policy designed to at least in part export capital and jobs to countries (and internally within the US to states) that pay lower wages and have fewer regulations including those related to working conditions and the environment. Hard to believe you don't know better.

Martintfre: that is what a good priest would do, because of what they preach. However in a rational discussion one has to show arguments. If you don like the argument, counterattack with another argument.

And yet, throughout history, not just the Church but priests have accrued massive estates. (This became an interesting crisis in the church some years ago; interesting story that does not end with the priests giving up wealth). I guess Martin is done trusting them, too.

When Reich gives away almost all his personal wealth till he is at the same level as the average american then I might start to believe him -- till then he is simply a shill for the big brother left

I am curious about your statement, who do you believe? Does having any money preclude someone being astute about what is going on economically? How much money does Reich have anyway that clouds his judgement? Then I have to ask, does having money, or not, cloud your judgement?

You attempt to demonize and accuse Reich of hypocrisy is in vain. For it is YOU who behaves as a shill, albeit for the wealthy elites who truly drive economic policy in this nation with little or no regard for the working class. Sad indeed as they have ample power via political influence and media ownership and require no support from average folks like us. Your posts never contain legitimate facts, but merely hastily contrived contrary opinions. Take your comments elsewhere please. How about the National Review?

With your usual gift for missing the point, you ignore Reich's argument about changing the entire system, instead introducing something that would not make the slightest difference to you, me, or the economy.

If you can't understand ideas for their own sake, regardless of who says them, you have nothing to offer here.

And so the wheels of history turn. The empires grow, and it takes thousands of serfs to support each lord and baron. The Waltons, Koch's, Dimon's rise and 'prosper' on the backs of the poor. Periodically, the serfs rise and kill their masters. All this has happened many times througout history.

Several months ago, Washington Blog posed the question: When will the peasants go medieval? luvdoc

Great question. Preceded by the question, when will the peasants begin to realize what has been taken from them, and who did it, and why?--an amazing weakness in so many people's perceptions. One would want them to attack the deserving target, after all.

I don't know what planet you live on but have you seen the yields on 10 year Treasuries. If they get any lower the interest will be negative! Institutional investors like pension funds are having to buy junk bonds to get any kind of decent yield. This could be the start of the next bubble.

Mannstein has, I suppose unintentionally, put his finger on a great lie, one that demands that we immediately, in a panic, act against our own self-interest.

PAY DOWN THE DEBT! CLIFF! DEFICIT! THEY NATION IS IMPLODING! In fact, this is one place we could afford to listen to our opponents on the right, but only during their own administrations,those who suck up the wealth and hate to share: "Deficits don't matter." Direct quote from R. Reagan, R. Cheney.

And, of course, they don't. They are far from our consciousness during GOP administrations--never mentioned, never asked about. Two wars and an impossible drug deal with Big Pharma, all on the card? Not a problem; deficits don't count.

The hysteria during Dem administrations isn't about debt or deficit; it's about crippling the Dems from realizing the goals of their agenda by sending them on a wild goose chase after debt and deficit. Clinton worked for eight years to leave a surplus at the end; it was blown away in three months, and that was even before 9/11. Next time somebody says "debt and deficit" to you in a high-pitched, panicky voice, just tell him, "Do it yourself when you get into office; we have more important business."

The Clinton IT bubble collapsed and there went his mythological surplus. How convenient that it happened on Bushes watch (not that I think that bumpkin did anything but turn around and build a real estate bubble to get out of the hole) Some day we should try building a real economy rather than some bubble designed to rip off taxpayers or pension funds.

You see, Mannstein, the low interest paid on Treasury Notes is WHY deficit and debt don't matter, at least in the short or medium run. The other important factor is that when we redeem treasuries ("pay debt"), the money goes directly into the economy where it generates more wealth than the value of the money the holder receives. Next time someone goes apoplectic about how the debt and/or deficit needs to be paid, look at him and say, "Why?" Then don't let him push you around, because you are right and he is wrong.

next bubble indeed...Is it possible even likely for the government to flood the market with digital dollars even if the interest rate is negative. Why? How?

With Quantitative easing III the treasury is buying the notes it is printing with more fresh digital dollars... nice.IT is like they keep printing and spending and there is no need to send us the bill since the inflation tax is built into the transaction....

next bubble indeed...Is it possible even likely for the government to flood the market with digital dollars even if the interest rate is negative. Why? How?

With Quantitative easing III the treasury is buying the notes it is printing with more fresh digital dollars... nice.IT is like they keep printing and spending and there is no need to send us the bill since the inflation tax is built into the transaction....

So why are we $16.3 trillion in the hole again?

Why? 1) The deficits run up during Reagan to pay for a huge military build-up; 2) The wars started during the Bush Administration (plus the tons now spent on "homeland security"); 3) the Bush tax cuts. This represents the bulk of our deficit.

Lastly, the debt is due to the fact that the US borrows money at interest from others rather than "borrowing from itself" (i.e., printing "digital dollars") at no interest (not to mention that this money is then paid back to ourselves instead of to someone else). The US gov't does not have to and in fact should never borrow from anyone else at interest. Eliminate the interest payments and you've gone along way to solving our current deficit problem as well.

just a tad of info that you can verify your self -- since Nixon the federal debt has never decreased , its rate of increase has slowed down from time to time -- the best and most recent slow down was during Clinton's "surplus" years yet the federal debt grew during that time from 5.5 to 5.8 trillion

Clinton's mistake was to allow the surplus to fall into the hands of the successor regime, from which it simply evaporated so that none was applied to the debt. So much for listening to the GOP urging us to spend less and save more--for them to spend like drunken sailors the next time they control the government.

// The US gov't does not have to and in fact should never borrow from anyone else at interest. Eliminate the interest payments and you've gone along way to solving our current deficit problem as well.// Sounds nice -- just don't test that model.

with zero percent interest and monopoly control over the money it is incredibly easy for government to print money to buy things - devaluing/inflating the currency and ripping off the public. Governments have done this over and over and every time it fails in debasement and national bankruptcy.

So far as Americans borrowing from the government (T-bills) is concerned, it might be good to increase the ridiculously small interest rates. T-bills don't attract the big market hogs because they aren't that lucrative, meaning the interest returns to the hands of the workers--and we know that money in their hands increases wealth while money in the hands of multinational corporations decreases it. Rather than hurting the economy, that particular interest is stimulative.

They don't care about your income - stop thinking like they give a flying fig about you. It is about the free use of money they create and then they send us the bill for their spending/borrowing .

Since the Federal Reserve existed during the 1950s and 1960s when corporate tax rates were also much higher, wages continued to rise, the middle class continued to grow and corporations continued to hire so the notion that the main cause of the decline of the middle class in the US is due either to the FED or to high corporate tax rates simply does not stand up to historical scrutiny.

Since the Federal Reserve existed during the 1950s and 1960s when corporate tax rates were also much higher, wages continued to rise, the middle class continued to grow and corporations continued to hire so the notion that the main cause of the decline of the middle class in the US is due either to the FED or to high corporate tax rates simply does not stand up to historical scrutiny.

FED THINKING at its finest!!!

Yes, it worked back then because AMERICA was the World economy!!

They used to say if America caught a cold the rest of the World got Pneumonia!

Japan beat Detroit in cars and China has taken over manufacturing.

The US can no longer dictate to the World.China will be the 800 pound gorilla soon if it isn't already.

The Fed still thinks that what happens here dictates to the World, but those days are gone.

China uses so much coal and oil that if the US slows down the price of energy barely twitches.

The Fed needs to find a new toolbox, because those tools of the 1950's have gone the way of the dodo bird!!

Edge, don't misunderstand me...my comment was not in support of the FED (which i would love to see abolished and replaced by a genuinely publicly owned national bank) my point was in response to Martinfre's contention that it is the FED and high corporate tax rates that are the reason US companies aren't hiring and i was simply pointing out (and or asking) then why in the 1950s and 1960s when the FED was with us and corporate tax rates were much higher and yet US corps continued to hire and expand. Martinfre never responds to this point.

your argument seems to be that it is due to the new global economy and the place of the US in it. I think there are elements of truth here but this needs to be fleshed out much more than simply saying that the US is no longer the world economy...one of the biggest changes has been the success of those calling for the international free-flow of capital so that there are no longer any real barriers for capital to go anywhere it wants (and use this threat) and where it will garnish the greatest rate of profit. It is the state (and not the FED) that has the power to restrict this and or create the conditions where it is more costly for US capital to move abroad rather than reinvest domestically. It is also the state and not the FED that has the power to create jobs when the private sector will not (for whatever reason).

This post is the core of the argument for government intervention to create jobs. What's also important about it is that yes, government must also restrict the offshoring of jobs.

There are too many advocates of the carrot -- reward corporations for not sending jobs away. That only increases profits with no real net gain to the economy. What's needed is the stick -- penalize those that do. If it's less profitable to use foreign labor, corporations will always do what's needed to maximize profits.

our factories were the only ones not wiped out during WW II so the world was our uncontested market place -- by time the 70's rolled around we were competing with the rest of the world and their new factories with our old ones.

our factories were the only ones not wiped out during WW II so the world was our uncontested market place -- by time the 70's rolled around we were competing with the rest of the world and their new factories with our old ones.

The point is not simply that our own industrial capacity/infrastructure emerged from world war II intact but rather or at the same time that there had been a sufficient destruction of capital overall to enable those left standing to invest again and expand and see the rate of profit that they need to continue to make this investment worthwhile. So, again, it is about the rate of profit for capital and this return to profitability was accomplished by a huge destruction of capital/wealth (both in the US during the depression and then world wide due to the war) which then the US was the first to be able to take full advantage of given the position of the US coming out of the war

Wedge: As far as I know, the Fed seemingly does a "balancing act" raising interests rates to avoid a recession, not "to cut off wage inflation." (Sounds like a made-up term) It lowers interest rates to avoid "sellers'" inflation, giving a consumer a little more buying power.

If many are desperate/needing a product or service that is low in supply, the seller has the temptation to raise prices, causing inflation, thus reducing buying power. This scenario has been played out, i.e., taking advantage of peoples' needs. Selling? Fine. Gauging one's prices? Fine. Selling out, thus, raising inflation? Not fine.

Wedge: As far as I know, the Fed seemingly does a "balancing act" raising interests rates to avoid a recession, not "to cut off wage inflation." (Sounds like a made-up term) It lowers interest rates to avoid "sellers'" inflation, giving a consumer a little more buying power.

If many are desperate/needing a product or service that is low in supply, the seller has the temptation to raise prices, causing inflation, thus reducing buying power. This scenario has been played out, i.e., taking advantage of peoples' needs. Selling? Fine. Gauging one's prices? Fine. Selling out, thus, raising inflation? Not fine.

Perhaps you are not an American are are ignorant as the the roll of the Fed, since you never heard of wage inflation!TRY GOOGLE: wage inflation

When an economy heats up the "workers" demand raises. The Fed does not like like that inflation and so to tamp down demand they raise interest rates making companies less profitable.When companies are less profitable they won't give raises and may reduce the workforce.

@edge: I would say workers would want a raise regardless. Given subsistence wages, NO ONE would turn that down.

Businesses are still profitable, e.g, a supermarket will always have customers for obvious reasons. Consumers have more buying power when prices are reasonable, in turn, businesses have a chance to sell more. (And hopefully without the temptation to raise prices too high and create inflation.) If inflation occurs, consumers lose buying power. Less business. Then a lowering of interest rates gives the chance for increased buying. More business. But businesses are not less profitable because of rising interest rates. It's because the economy is overheating, then the threat of a recession is possible. And 2008 was quite an example that "greed is good." The financial sector went all out, hook or crook, meaning peoples' money was virtually gambled away or lost from corrupt practices by executives, investment banks, Hedge funds, etc. who wanted a perpetual "money tree" regardless. With less and less governmental regulations, more and more greed. So, if you're worried about the profitability of businesses, don't blame workers for, example. They are not 1%ers. Blame greed that's within the nature of this economic system. Big business, e.g., laid off many workers not because of less profit, but for upper management to get more.

That's an argument for better management, not one against keeping up production to meet demand.

The word "profit" is thrown around as if that's an indication of viability. A business can be solvent without being profitable. Profits are only the "extra" above the break-even that's paid to the shareholders.

The Fed RAISES interest rates to cut off WAGE INFLATION!!They do not want your incomes to move up!!!

Then the idiot in the White House wants the Tax Rate to raise on the wealthy.

You can raise it to 100% and Warren Buffet won't pay much more than he does now... most of his money is not ordinary income! Obama is scamming us!

Yes, the guy that owns the corner store will pay more but not Buffet and Romney.

No one has suggested raising the TMR A LITTLE (like 50%) will fix it. You need a SIGNIFICANT TMR - as Ike recognized- to overcome loopholes you can't afford to fight. But you also need price controls to keep business from simply passing it on, and SIZE controls on business (as Sweden and Norway realized) so it can't overwhelm the People's democratic government.. otherwise it's not a Republic, it's a Plutarchy (financial subset of Oligarchy.) Any "-archy" at all is the antithesis of a Repubilic - by definition.

The ultimate plan is to break down all national soverignity that might stand in the way of maximizing corporate profit. Things that currently stand in the way of that now are environmental laws, unions & collective bargaining for decent wages, government programs that help the less fortunate among us-the old, poor, young, sick etc. the plans of the wealthy stateless Oligarchs are going very nicely so far. NAFTA,CAFTA and finally the TTP which will put the final nail in the coffin of people's hopes for a decent life. If you are not a 'Master' you will be a landless peasant, an IDP (Internally Displaced Person) don't believe it? Ask those who were displaced from Katrina and Sandy, by fracking and foreclosure.

Eminent domain is identified in the Constitution as an legitimate power of the government.

There are many times that the taking of private property is a public necessity. In that sense Eminent Domain and the authority to tax are very similar. The Court, unfortunately, about 5 years ago, ruled that Eminent Domain can be exercised so to benefit a private interest. That ruling when paired with Citizen's United, has altered the nation; and not for the better.

Martinfre needs to focus on the mega-wealthy wielders of real POWER, like Gov.Dick in Michigan. The MI Ballot Proposal was successfully described as OVERREACH, & may well have been, & it went down in a cluster of Proposals that generated mistrust, especially about changing the MI Constitution. It wasn't an anti-Labor vote. Right to Work is a key weapon in CLASS WARFARE; best to have the cards on the table. The mega-Rich spend billions trying to obscure the class nature of their hostility to democracy; all clarification is good, should lead to ACTION. Rick-Scott-Walker declared WAR. They should get political & social warfare like the early Union movements & Civil Rights. NO one can WAIT for 2014 to begin whimpering.

// It wasn't an anti-Labor vote. Right to Work is a key weapon in CLASS WARFARE;//

Without an argument of divisive class warfare, an unearned greed for what others have -- what is left for the collectivist like the unions?

As I understand the MI right to work bill - it simply makes union dues voluntary.

If a union can't voluntarily earn a workers membership dollar what breach of reason makes it rational to believe that forcing union dues will make the leadership more accountable to the members when the guaranteed dues encourages and rewards unaccountable behavior.

You are correct, Martin, that unearned greed has fueled the years of fake trickle down and now fuels the stealing of elections as well.

A "fair" return would be based on the value an employee added to the product. In all other countries, CEOs are paid more than workers, but never a multiple of more than 2 digits. The shocking disparity in the U.S. is 400:1--unearned compensation for the greedy at the expense of everyone else.

For comparison: When the bank crash of the Great Depression hit, CEOs were earning 163x worker salaries. When the Bush Great Recession hit, CEOs were earning 163x worker salaries (cute coincidence, huh?). Now CEOs are earning 400x worker salaries, they are not just winning the class war but burying us so deeply we will never get out.

Worse by far: They are removing much of their wealth from the country. So it doesn't circulate back in our economy, where it would create wealth which would improve the nation and all the people and services. Whenever they take money out, it exacerbates the recession.

We can all agree that what has been attempted over the past 4 years in Europe has been an utter failure. The point of disagreement is the chicken or the argument. There are two chicken/egg viewpoints. The first argument is about austerity and did it create the problem or is it the solution? The second debate is about deficit spending, notably about the same question, did it create or is it the solution?

Ok, right wingers out there, pay attention. Europe has been inflicting full bore austerity on the areas of the economy that are weakest and the result is conclusive. Austerity makes everyone broke, it bankrupts people and governments. Whatever is left over gets transferred to the Money Lenders.Why do you think it will magically work here? The only reason that we are not in a recession is that President Obama and the Democrats have resisted falling for your insane, ravings.

Why are you so terrified to just say, OK Dems, you won, you get your way. And when the economy tanks, the Republicans can have the House, the Senate, and the White House.

The reason is simple. You know you are wrong. And therefore, you don't really give a rats ass about the American people, they are secondary in the Right Wing world.

because the elite are the benefactors of the debt. The profits of the debt go to them and any serious deflation will wreck their beautifully built Ponzi Pyramid Tree. In other words, their wealth is your obligation to pay them. When you stop paying, they become poor and they can't allow that to happen.

Ok, right wingers out there, pay attention. Europe has been inflicting full bore austerity on the areas of the economy that are weakest and the result is conclusive. Austerity makes everyone broke, it bankrupts people and governments. Whatever is left over gets transferred to the Money Lenders.SNIP.

CLOSE, but no cigar!

Greece and other welfare countries are a victim of the Euro!Since they can't devalue their currency they keep falling behind and the richer industrial countries like Germany get the advantage.

If they got out of the Euro then the Greek currency would drop and their products would be cheaper to buy. Germany's currency would rise making their products more expensive.

That would create more demand in Greece and less in Germany and would even out the playing field.

Your solution will allow Greece to drop the enforced austerity and resolve their problems by allowing a form of deficit spending. Devaluing a currency is just another way to make more money available for investment that will increase demand.

Your solution will allow Greece to drop the enforced austerity and resolve their problems by allowing a form of deficit spending. Devaluing a currency is just another way to make more money available for investment that will increase demand.

I was pointing out that your solution was inconsistent with an austerity plan. And that decoupling Greece from the Euro and devaluing their currency from its current Euro based value would have the same effect as deficit spending. In other words, as I said it will increase demand. Increased demand is a good thing.

This is nothing new really unless you still believe the myth that the US is a Democracy.What the Koch's and their finks like Rove want is nothing less than everything, a barely-educated enough to march in lockstep slave population and a one-party system that can be sugar-coated in a fair cloak like "Americans for Prosperity (for a very few).They are closer than you think.I'd like to hear some possible solutions from Dr. Reich rather than just spelling out a well-known fact, even to those who seemingly envy and criticize his alleged wealth (open to question) for doing what I find a generally useful job in clearing up the deliberately obtuse language of eco-speak for the rest of us and thereby worthy of a certain level of reward, instead of the much higher paid owner-media's elected and predictable pundits who exercise corporate-self-aggrandizement speak on the network channels and Fox-fantasy.I thoroughly recommend Dr. Richard Wolff's "Capitalism Hits the Fan" for in-depth clarification and some solutions for the grassroots. He is a kind of economist's Bernie Sanders.

NAFTA is part of it but so is the drug culture and the keeping up with the Jones syndrome and the use of the best trained psychologists in the world to get people to buy what they don't need. It is about the educational system being so overwhelmed with mandates and demands that the youth aren't being educated. It is about how greed is good was sold to us and about how Congress is bought and paid for by special interests. It is about unhealthy addictive food causing both low brain power and high medical costs. It is about how profit has so invaded the medical costs that our mediocre health care costs roughly twice what better health care costs in the rest of the world. It is about how Banksters can do what ever they want and get away with it... It is about a for profit news corp who will sell you their agenda and make you think it is the real truth.

It isn't just about the demise of unions. It is about the demise of American standards and morals. It is about America stuck on Stupid.

We are not a democracy. as the founders were quite aware of history that democracies always commit suicide by the majority voting them selves largess from the public treasury soon bankruptcy follows and a dictator arises to save the stupid people from them selves.

@Martintfre: Yeah, U.S. founders didn't favor democracy. They would have rather established a bourgois aristocracy, despite condemnations against the British version, and in the face of the line "All men are created equal," and promoting liberty; but being more equal than others.You ignore that any system can break down, for one reason or another. If the idea of maintaining an republic based on some myth of classist supremacy is feasible, it would have continued. But,the supremacy myths were torn down, since democratic rights, sounding akin to the Bill of Rights, didn't discriminate racially, genderly and apart from a caste-like system.

I suggest that you read the federalist papers if you care to actually get a flavor for the founders intended.

and I suggest you not invent for me what I allegedly know or do not know... to wit://You ignore that any system can break down, for one reason or another. //

If you actually understood the founders then you would know that they were certain that people intended to break the system to their own advantage. They had just cast off a tyrant and were not interested in replacing him with another.

That is why the founders created three branches each with the power to stop the others. And that they explicitly tried to guarantee the rights of the individual not the rights of the government , but the rights of the individual via Bill of Rights.

Well, you do ignore that about systems, as you make it sound like democracy has a monopoly on "breaking down." All systems aren't perfect because of human imperfection.

Quoting: "...you would know that they [U.S. founders] were certain that people intended to break the system to their own advantage." Certain or not, it was inevitable, especially when you say "All men are created equal" and have slaves. If they were certain, they got what they didn't support: A form of democracy.

If 70% of US GDP is consumer spending, people must be wasting enormous amounts of money, and there has got to be a serious imbalance if a government must act as "consumer of last resort" wasting more money on arms purchases. I am sure that the main harm done by inequality is that it deprives people at the bottom -- and especially the working poor, of the leisure to participate. Why not try out a universal minimum income. Start out with a few thousand dollars a year -- for everybody wealthy and poor alike. The only requirement being that you register and voteElie YardenGreen-Rainbow Party

The false premise that for one person to get rich others have to be made poor is a destructive lie promoted by greedy people who lust for power over others and accepted by unthinking fools or greedy swine who want to get an unearned piece of some one elses pie.

In the United States, currency is THE currency. All monetary transactions, in any form, represent the transfer of currency. Whether the physical dollars are actually transferred or not, they must exist in tangible form somewhere.

There's nothing "inevitable" about history. There is only the need to learn lessons from it and not make the same mistakes. Germany in the 1920s was practically bankrupt from war reparations.

In contrast, the United States possesses more wealth than any other country in the world. The doom-and-gloom paranoia of the right is a sick joke. It would take an enormous catastrophic blunder for the U.S. to print enough more money to actually get in trouble.

//This is not a theory - its a FACT, //Being clueless is one thing, refusing to get knowledgeable is another.

I assume you believe in the Scrooge McDuck philosophy of economics where he hoards all his wealth a vault and never spends it.I suggest looking up the concept of the velocity of money -- and try try try to grasp the concept (most do not) that paper money is not wealth - only a pointer to wealth, an exchange medium to convert/trade item x for item y or time and labor of item x.

//This is not a theory - its a FACT, //Being clueless is one thing, refusing to get knowledgeable is another.

I assume you believe in the Scrooge McDuck philosophy of economics where he hoards all his wealth a vault and never spends it.I suggest looking up the concept of the velocity of money -- and try try try to grasp the concept (most do not) that paper money is not wealth - only a pointer to wealth..

Justify the concepts of pure market speculation and hedging (selling off risk) with that THEORY.

I say THEORY, because (for instance) even the concept once thought an absolute LAW, of "Supply and Demand;" has been completely obviated by hoarding, closing profitable, successful refineries, PR lying about unjustified shutdowns, and other apparent supply manipulation. (That's from Bloomberg - not myself.)

Do not confuse the pseudoscience of economics with reality. And yes, I had to study it. Like much of "science" (cf: Heisenberg, and I'm a degreed engineer,) it refuses to admit its ineffectiveness, and was thus worthy of instant discard from memory.At least Psychology admitted it was not a science.

Economics needs to do the same - or (much like capitalism) have such a radical update it needs a new name.

The FACT to which -I- referred was that it always comes from someone else. When the Rich got richer -the poor got poorer. Statistical FACT.

Money should never -NEVER- be allowed to appear to replicate itself by sheer volume, some sort of critical mass.

And yes, at the levels of higher finance, hoarding -through offshoring and elimination of personal risk-- is so rampant it's a given base characteristic of the wealthy. That's because we don't punish (OK, "CAP") it, as do more enlightened countries who have learned the lesson we STILL choose to ignore. Government cannot and must not be, in ANY way or degree, "Pro Business." (Mussolini had a word for that..)

Patriotism, humanity, and job creation -even morality and ethics- are NOT goals, or even recognized quantities, of business. They are the purview of GOVERNMENT - which creates it as inherently and properly ANTI-BUSINESS.

Ours needs to admit that as it once did-back when America was far more prosperous for it.

Hoarding and supply manipulation for profit, and even for long-term strategic political goals; take place.

Such conclusions and statements about the economy still cling to the radically outmoded assumption that at least our laws (antitrust, bribery, corruption;) are obeyed - or even enforced. They are neither.

Quotingm Martintfre: "Scrooge McDuck philosophy of economics where he hoards all his wealth a vault and never spends it." Regarding at least the hoarding (perpetual accumulation) sounds like Ken Lay. And he was for real.

@Martintfre: The 2008 recession sure made greedy people lust for power, economic and otherwise. Thanks, e.g., to less accoutability because of less regulations.

2008 collapse and bail out was because of regulations. Politicians guaranteed to back fill losses so 'risky' behavior was no longer risky and the politicians did back fill to cover the losses -- thieving swine.

@Martintfre: That's funny. For over 30 years there's been more and more deregulation. That makes "thieving swine" to be held less accountable; I mean, e.g., the executive AND political "swine" being ideological allies, both fed off deregulation and financial corruptness. You don't see the ideological connection. I'm amazed. There wouldn't be the corrupt "risky behavior" in the first place-and thus less chance of an Enron- if regulations remained intact, i.e., preventing further private monopoly and the latter unaccountable to former regulations. Corporate profits have sky-rocketed over the years. But, upper management, e.g., knowing the absense of regulations, thanks to political allies, went for it, not just wanting more, but more...etc. Corruption and conflicts are then inevitable: Too few have too much at the expense of too many having too little. 2008 was a significant example.

Whatever it says about human nature, I find bizarre the outpouring of hatred and resentment by workers toward other workers who have, for the moment, secure well-paying jobs--their fierce desire that those people suffer--while they just can't get mad at the people who actually took away their jobs and are now deliberately breaking the wage structure so if the haters do get jobs, they will be underpaid.

I know people on the political right adhere to authority and dominance (makes them feel secure?), but this is just irrational.

Fiona, I was equally stunned until I sawbehind the curtain. It's the Koch's etal using the Beck's, Limbaugh's and other repug pundits to distort the cause of the 99%'s diminishing prosperity from the robber baron class and blame the victim. If one worships money and equates it with self esteem, then those who have achieved great wealth by theft are adulated and the victims are easily duped into believing their enemies are of their own class. It's the same principle with sports "heroes". How many people have howled in fury when the worshiped ones fell in disgrace...not because they were caught doping or shielding pedophiles, but because they were outed and the myth exposed.

Inequality isn't "undermining our democracy", it's actually building the evils of democracy. Inequality is undermining our CONSTITUTIONAL REPUBLIC, the opposite of democracy. The latter is two wolves and a sheep deciding what's for dinner; and, obviously, the "sheople" are going to be eaten by the globalist, corporate-fascist wolves that run democracy. So, we really need to completely stop calling what is ONLY supposed to be a constitutional republic, a democracy; the latter of which is really "dem(on)ocracy", demonizing the People and seeking to enslave us all under absolute, totalitarian corporate-fascist rule. And, in reality, that is what U.N. globalism has always desired, and has been working towards for many decades now; little by little so as not to arouse too much of the People's suspicion(s), and very little dissent against it, which has worked like a charm. Now the globalist corporate-fascists are in their endgame, and finalizing our complete, total and pitiless, unmerciful lockdown with no True Liberty(ies) and Freedom(s), and withholding of everything necessary to survive to all those who don't voluntarily accept and sell their souls to its evil(s) entirely. Therefore, we all have the duty to, and must, stand up against all of it. One-world government and religion is not the salvation of the world from its ills and strife, contrary to what they will claim; and it is nothing but the exact opposite. Be warned, and everyone NON-VIOLENTLY rise up en masse against it.

".. Inequality is undermining our CONSTITUTIONAL REPUBLIC, the opposite of democracy." ..... So, we really need to completely stop calling what is ONLY supposed to be a constitutional republic, a democracy;

In no acceptable nor creditable definition is this distinction true.You can have democracy in a republic.We have in fact a representative democratic republic.

The definition of "republic" extends no farther than, that it is the absence of a monarch - or ANY "-arch," any system where a SELF-appointed few (or one) dictate to the many.Literally it means: "a thing of the (entire) people, or population."

A "Plutarchy," (ruled by the richest)which we have unintentionally become, is actually ONE possible antithesis of a "Republic."

Incidentally and also, tautologically as well as functionally, there is NO SUCH THING as "the tyranny of the majority."

Then the U.S. is now a plutarchy or plutocracy. One of my main points was and is that what is being called "democracy" in the U.S., is evil. It's not truly about and/or providing liberty and freedom, but only the appearance of them. The constitutional republic that the U.S. was ONLY meant and/or supposed to be, represents and provides freedom and liberty, TRUE Liberty and Freedom, not simply the guise of them. That is the opposite of the "democracy" that the U.S. now claims to have, while it portrays itself as representing and providing a constitutional republic and/or True Freedom and Liberty which it does NOT, in truth, represent or provide. In other words, the so-called "democracy" of the U.S. is a plutocracy wearing the mask of a constitutional republic, the opposite of what it is. So, mince words as much as you are inclined to do, but I stick by everything that I said in my original comment.

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